Late last year, Ruchir Sharma wrote a short essay for Foreign Affairs in which he said, "no idea has done more to muddle thinking about the global economy than that of the BRICs." Sharma meant that too many pundits were buying growth extrapolations as gospel, when it turned out that the state capitalism model embraced by some of these countries might have a few flaws in it. And indeed, the announcement this week that China has decided to, "conduct a broad audit of debts incurred by government agencies" is a data point in Sharma's favor.
There's a related point about the BRICs that gets lost in the mist, however -- they're also behind the curve when it comes to their diplomacy. Now, part of this is because, Russia excepted, they are latecomers to a lot of these international institutions, so they still need to move down the learning curve. Part of it is that others believe that they're rising faster than they actually are, which can lead to a mismatch in expectations. In Foreign Affairs a few months ago, Manjari Chatterjee Miller noted:
Other observers fret about the pace of India’s rise, asking whether New Delhi is living up to its potential, whether the country’s shoddy infrastructure will hold it back, and whether it is strong enough to counter an increasingly ambitious China. All of this frenzied discussion, however, overlooks a simple fact: within India itself, the foreign policy elite shies away from any talk of the country’s rising status. As a senior official who has worked on India’s relations with Western countries recently told me, “There is a hysterical sense, encouraged by the West, about India’s rise.” A top-level official in India’s foreign ministry echoed the sentiment: “When do we Indians talk about it? We don’t."
Sometimes the two phenomenon combine to some curious BRIC behavior in international institutions... which leads to today's intriguing Financial Times story from Samantha Pearson and James Politi:
Brazil reversed its hardline stance on Greece’s bailout on Thursday, saying it had not authorised its representative to the International Monetary Fund to withhold support for the latest aid to Athens.
Guido Mantega, the country’s finance minister, said it was a “mistake” for Brazil’s representative, Paulo Nogueira Batista, to abstain on the €1.8bn tranche of aid. Mr Mantega said he fully supported the IMF’s efforts to supply financial aid to Greece.
“[Mr Nogueira Batista] did not consult the government, nor was he authorised by us to vote in this manner and the finance minister has ordered him to return to Brazil immediately to explain himself,” Brazil’s finance ministry said....
Mr Mantega’s statement was met with some disbelief among political consultants in Brazil, given that the finance minister has been among the most vocal of the IMF’s critics.
As well as leading efforts to create a rival development bank funded by the Brics – Brazil, Russia, China and South Africa – emerging economies in March, Mr Mantega has frequently complained about the damage that US stimulus measures have done to emerging economies.
Paulo Kramer, a political scientist with the University of Brasília, said Mr Mantega’s latest position may be a sign of his political weakness after almost three-years of subpar growth and amid calls for him to resign.
“He knows he is hanging by a thread,” Mr Kramer said. “Probably someone warned him to tone it down, to change his rhetoric about the first world always taking actions that damage the developing world.”
Do bear all of this in mind the next time someone says "The BRICS are coming!!!"
In the New York Times, Mark Landler and Peter Baker review Barack Obama's personal diplomacy with other world leaders, and find it wanting. They make a pretty interesting case:
While tangling with the leaders of two cold war antagonists of the United States is nothing new, the two bruising encounters in such a short span underscore a hard reality for Mr. Obama as he heads deeper into a second term that may come to be dominated by foreign policy: his main counterparts on the world stage are not his friends, and they make little attempt to cloak their disagreements in diplomatic niceties.
Even his friends are not always so friendly. On Wednesday, for example, the president is to meet in Berlin with Chancellor Angela Merkel of Germany, who has invited him to deliver a speech at the Brandenburg Gate. But Ms. Merkel is also expected to press Mr. Obama about the National Security Agency’s surveillance programs, which offend privacy-minded Germans.
For all of his effort to cultivate personal ties with foreign counterparts over the last four and a half years — the informal “shirt-sleeves summit” with Mr. Xi was supposed to nurture a friendly rapport that White House aides acknowledge did not materialize — Mr. Obama has complicated relationships with some, and has bet on others who came to disappoint him....
Mr. Obama differs from his most recent predecessors, who made personal relationships with leaders the cornerstone of their foreign policies. The first George Bush moved gracefully in foreign capitals, while Presidents Bill Clinton and George W. Bush related to fellow leaders as politicians, trying to understand their pressures and constituencies.
“That’s not President Obama’s style,” said James B. Steinberg, Mr. Clinton’s deputy national security adviser and Mr. Obama’s deputy secretary of state.
Such relationships matter, Mr. Steinberg said, but they are not the driving force behind a leader’s decision making. “They do what they believe is in the interest of their country and they’re not going to do it differently just because they have a good relationship with another leader,” he said.
It is to Landler and Baker's credit that they provide the appropriate context to this phenomenon in their story. Personal relationships -- especially with rival great powers -- don't count for a hell of a lot. As they note, "Mr. Clinton and Mr. Bush forged strong partnerships with their Russian counterparts, Boris Yeltsin and Mr. Putin, respectively. But even that did not prevent ruptures over NATO military action in Kosovo and the Russian war in Georgia." So even if the Obama administration did not go the extra mile in wooing the leader of China, for example, it likely wouldn't have mattered much.
So can we leave it at the "nations have 'only permanent interests'" conclusion? I fear neither life nor world politics is that simple. My concern reading Baker and Landler's story isn't about the lack of warmth between Obama and great power rivals, but rather the lack of warmth between Obama and U.S. allies. The story notes that relations with French president Francoise Hollande are strained for a number of reasons. Obama has made committed numerous small faux-pas with his British counterparts as well. Landler and Baker fail to identify any personal relationship between Obama and an allied leader that is particularly warm (though Chuck Todd suggests Angela Merkel). The only "warm personal relationship" the press has identified between Obama and a current world leader is Indian Prime Minister Manmohan Singh. Unfortunately, as Indian foreign policy analysts like to stress, the United States is not their ally and New Delhi is not ready for prime time on the global diplomatic stage anyway.
It would seem that Obama has a deficit of close personal allies and confidantes at G-20 meetings or other confabs. Which isn't exactly a big deal but seems a bit problematic. Sometimes advice from staffers, underlings, or even cabinet members can be dismissed in a way that advice from a nominal peer cannot. All leaders -- especially powerful ones -- are served well by a coterie of allies who can speak truth to power.
That's how things should work in theory to correct misperceptions and the like. In practice, of course, it's worth remembering that Tony Blair was both Bill Clinton and George W. Bush's closest friend on the global stage. Those friendships produced... mixed results. So maybe, in the end, this is a big bunch of nothing.
What do you think?
In today's paper the New York Times has two long stories on the two largest countries in the world: one on China and one on India. What's interesting is that both stories talk about the tensions between national and regional governments -- but their interpretation of the behavior of these local governments is very different.
Let's start with China, where Andrew Jacobs notes that political paralysis at the national level combined with the economic slowdown is causing regional governments to double down on their debt-driven growth:
Local governments, alarmed by a slowdown they fear could lead to mass unemployment and the kind of sluggish growth that can dent political careers, have decided to take matters into their own hands. In recent months, a number of cities have proposed extravagant infrastructure projects they hope will be financed in part by newly liberalized bank loan policies.
Tianjin claims $236 billion will be spent in the petrochemical, aerospace and other industries. Xi’an, home of the famed terra cotta warriors, plans to invest tens of billions of dollars on nine new subway lines. In Guizhou, one of China’s poorest provinces, officials said they hoped to funnel $472 billion into tourism-related development.
In Changsha, the provincial capital of Hunan, officials brag of 12.9 percent growth as they spend billions of dollars on a new subway system, a ring road, an intercity rail line and a pair of bridges to knit together its transportation system.
“We haven’t felt any impact from the crisis in Europe,” said Liu Maosong, chairman of the Hunan Economics Association and an adviser to the Changsha government. “Our guiding philosophy is ‘investment, investment, investment.’ ”
Even if many such projects turn out to be wishful thinking, economists have expressed alarm that municipalities are still chasing debt-financed growth. “It almost scares me to death,” said Mao Yushi, a prominent economist. “Local governments are using the people’s money for investment, but when they can’t repay the banks, the financial system will snap.”
And Liao Jinzhong, an economist at Hunan University, worries that much of the spending is misplaced. “What we really could use is a functioning sewage system,” he said, speaking from his sixth-floor apartment in a crumbling faculty building that has no elevator.
Mr. Liao said he gave frequent lectures at the local party school about the dangerous fixation on propping up growth figures at all costs. He said officials often congratulated him on his frank views.
“But then they admit they can’t change the way they do things,” he said. “Given that the whole system is oriented toward bolstering the careers of officialdom, I just don’t see things changing any time soon.”
Interesting... so because of the political incentives that exist within the Chinese Communist Party, provincial and urban leaders have an incentive to prime their pumps to seek advancement.
Now let's turn to India, where Jim Yardley notes that -- wait for it -- seeming paralysis at the national level and a sagging national economy are causing unaffiliated leaders at the regional and local level to muse about things like forming a third party and compete at the national level. Yardley notes that the likelihood of success is low. What's interesting, however, is the question of why these local leaders are so popular:
Regional bosses, once in decline, are becoming kingmakers again: the squat, sleepy-eyed Mulayam Singh Yadav, who oversees the powerful Samajwadi Party, is even publicly musing about himself as a future prime minister.
“The incentive for every single party from the opposition to the allies is to send a signal that the Congress can’t govern,” said Pratap Bhanu Mehta, president of the Center for Policy Research in New Delhi. “That’s the election plank.”....
“Indian politics will have to live with bargains and negotiations with regional parties,” Ashutosh Varshney, a political expert, said in an e-mail interview. “A third front may or may not emerge, but both national parties will have to negotiate and bargain. That also means that India will find it harder to make firm assertions of power on the international stage, à la China. Its power will grow, but more gradually.”....
In the meantime, India’s regional leaders will continue to press for advantage. Ms. Banerjee is planning a huge demonstration in New Delhi on Monday against the government’s new economic measures. Even as [Bengal Chief Minister Ms. Mamata] Banerjee is often criticized for being intemperate and unpredictable, her influence is undeniable: this week the American ambassador, Nancy Powell met with her privately, just as Secretary of State Hillary Rodham Clinton made a point of visiting her during a trip to India in May.
Other regional leaders are also increasingly powerful national figures. Nitish Kumar, the chief minister of the state of Bihar, has hinted that his regional party could join any coalition that granted his state special status. Naveen Patnaik, the chief minister of Orissa, has expressed support for a third-front coalition. Jayalalithaa, the chief minister of Tamil Nadu, has also spoken suggestively about a new political alliance.
Most of them have won political support by delivering economic growth and, to varying degrees, improved government. This is one reason that even as India’s politics is again fragmenting, some analysts believe that the country’s economic modernization can continue. In recent years, as policy logjams paralyzed the central government, many international and domestic business leaders shifted their focus to negotiating with individual state leaders.
So, if one buys both of these stories, there's an interesting contrast. Both countries appear to be dealing with feckless national leadership and a slowdown in their national economies. In China, regional leaders are pursuing reckless "growth now" policies that could harm the national economy in the long run. In India, it's the competent economic leadership at the regional level that's bailing out a dysfunctional national government (emphasis added).
The thing is, I don't know if I completely buy Yardley's story on India. I've read enough on China to know that Jacobs' assertion about bad regional policy seems to be pretty accurate (not to mention the out-and-out distortions in economic statistics coming from China's provinces) I wish he had pushed a little bit deeper to see exactly how these regional political bosses had delivered better economic growth. If they did it using variants of what China's leaders did -- short-term measures that accelerate growth now at the expense of growth later -- then what's interesting is that regardless of regime type, local leaders can make life hell for national economic policymakers. If, on the other hand, India's regional leaders have done a genuinely better job at governing, then it's a really interesting story.
What do you think? Psst... in this case, by "you," I mean India experts.
Bill Keller has moved on from the esteemed position of New York Times executive editor to the very vulnerable position of New York Times Op-ed Columnist Ripe for Mockery.
Alas, it's hard to mock Keller's column today for two reasons. First, Keller bothered to do some actual reporting, traveling to India to interview supporters of Anna Hazere to get their opinion on Occupy Wall Street. Since the Times itself has suggested that overseas protest movements might inspire similar action in the advanced industrialized economies, this seems appropriate. It certainly seems more appropriate than comparing the Occupy movements to the Arab Spring.
The second reason is what Keller got from his interview with Anna Hazare associate Kiran Bedi:
“When we started the movement, it was like Occupy,” Bedi told me. “But we went beyond Occupy.”
For starters, while Occupy Wall Street is consensus-oriented and resolutely leaderless, Hazare is very much the center of attention. There was an anticorruption movement before Hazare, but it was fractious and weak until he supplied a core of moral authority. When he announces his intention to starve himself, he parks himself on an elevated platform in a public place, thousands gather, scores of others announce solidarity hunger strikes, and TV cameras congregate, hanging on his every word. Hazare and his entourage can seem self-important and high-handed, but he is a reminder that leadership matters.
Second, the Occupiers are a composite of idealistic causes, many of them vague. “End the Fed,” some placards demand. “End War.” “Get the money out of politics.” Much of the Occupy movement resides at the dreamy level of John Lennon lyrics. “Imagine no possessions. ...”
Hazare, in contrast, is always very explicit about his objectives: fire this corrupt minister, repeal that law bought by a special interest, open public access to official records.
His current mission is the creation of a kind of national anticorruption czar, a powerful independent ombudsman. The measure is advancing, and Team Anna hovers over the Parliament at every step, paying close attention to detail, to make sure nobody pulls the teeth out of it. Instead of a placard, Bedi has a PowerPoint presentation.
Occupy Wall Street is scornful of both parties and generally disdainful of electoral politics. Team Anna (yes, they call themselves that) likewise avoids aligning itself with any party or candidate, but it uses Indian democracy shrewdly, to target obstructionists. Recently Hazare turned a special election for a vacant parliamentary seat into a referendum, urging followers to vote against any party that refused to endorse his anticorruption bill. Hazare has also called for an amendment to the election laws to require that voters always be offered the option of “None of the Above.” When it prevails, parties would have to come up with better candidates.
“What really changes them,” Bedi said of recalcitrant politicians, “is the threat of losing an election.”....
“Occupy has been, to my mind, an engaging movement, and it’s driving home the message, to the banks, to the Wall Street circles,” Bedi said. “That’s exactly the way Anna did it. But we had a destination. I’m not aware these people — what is their destination? It’s occupy for what?” (enmphasis added)
Damn, that sounds familiar.
There's one other big difference that's buried in Keller's column, however. He notes that, "One poll found 87 percent public support for Hazare’s 12-day August fast." While the Occupy movement is certainly more popular than the Tea Party movement, I haven't seen a single U.S. poll demonstrating that breadth of public support.
Am I missing anything?
I'm going to go out on a limb and state unequivocally that I think civil liberties and gender equality are Very Good Things. All else equal, I'd much rather live in a society in which freedom of speech is protected and women have all of the rights and opportunities afforded to men.
I bring this up because a common assumption that guides much of global economic policy is that as developing countries get richer, they will start valuing these qualities as well. There's a belief that regardless of the sequencing, political modernization will not trail too far behind economic modernization. Even in anomalous countries like Singapore, for example, there are trends suggesting that richer societies start demanding all those political and personal freedoms that many in the West take for granted. Crudely and simply put, a guiding assumption behind much Western policymaking (as well as many foes of the West writ large) is that modernization = Westernization.
I bring this up because China and India are, at the present moment, trying to prove this assumption is wrong. China has been getting very rich very fast, and yet the Chinese government seems more repressive than ever. So much for political liberties.
In some ways, India is even more troubling, as the New York Times' Jim Yardley report:
India's increasing wealth and improving literacy are apparently contributing to a national crisis of “missing girls,” with the number of sex-selective abortions up sharply among more affluent, educated families during the past two decades, according to a new study.
The study found the problem of sex-selective abortions of girls has spread steadily across India after once being confined largely to a handful of conservative northern states. Researchers also found that women from higher-income, better-educated families were far more likely than poorer women to abort a girl, especially during a second pregnancy if the firstborn was a girl....
The study, being published in the British medical journal The Lancet, is the latest evidence of India’s worsening imbalance in the ratio of boys to girls. The 2011 Indian census found 914 girls for every 1,000 boys among children 6 six or younger, the lowest ratio of girls since the country gained independence in 1947. The new study estimated that 4 million to 12 million selective abortions of girls have occurred in India in the past three decades....
Dr. Prabhat Jha, a lead author of the study, noted that the use of sex-selective abortions expanded throughout the country as the use of ultrasound equipment became more widespread. Typically, women from wealthier, better-educated families are more likely to undergo an ultrasound, Mr. Jha said, and researchers found that these families are far more likely to abort a girl if the firstborn is a daughter.
“This is really a phenomenon of the educated and the wealthy that we are seeing in India,” said Mr. Jha, director of the Center for Global Health Research at the University of Toronto.
Census data has already confirmed that the problem has accelerated since 2001. The 2011 census found about 7.1 million fewer girls than boys under the age of 6, compared with a gap of roughly 6 million girls a decade earlier (emphasis added).
The steady decline in the ratio is surprising, and counterintuitive, in view of India's progress in recent decades in improving the levels of female literacy and increases in income per person....
the value of the analysis by Jha and colleagues is mainly independent confirmation of two important aspects of the sex ratio in India that have been reported previously with different data. The first is that sex imbalance at birth seems to be particularly concentrated in households with high education and wealth. This pattern suggests that dominance of the son-preference norm is unlikely to be offset, at least in the short term, by socioeconomic development. Second is that the overall problem of sex imbalance seems to arise throughout India, including in Kerala, which has often been characterised as a model state for social development and gender equality. The problem of sex imbalance seems to be a function of socioeconomic status, not geography.
As India gets richer, this problem will only get worse.
Now, this might be one of those "it's always darhest before the dawn" kind of trends, in which after a certain wealth threshhold, trends will shift back towards a more classical liberal direction. Maybe. I don't know, and anyone else who tells you that they know is bulls**tting you. Based on this study, however, the question of whether China and India will ever embrace liberal political and cultural norms is not going to go away anytime soon.
What do you think?
Yesterday there was a small but very public disagreement between U.S. Secretary of State Hillary Clinton and Indian Environment Minister Jairam Ramesh:
[T]he clash between developed and developing countries over climate change intruded on the high-profile photo opportunity midway through Clinton's three-day tour of India. Indian Environment Minister Jairam Ramesh complained about U.S. pressure to cut a worldwide deal, and Clinton countered that the Obama administration's push for a binding agreement would not sacrifice India's economic growth.
As dozens of cameras recorded the scene, Ramesh declared that India would not commit to a deal that would require it to meet targets to reduce emissions. "It is not true that India is running away from mitigation," he said. But "India's position, let me be clear, is that we are simply not in the position to take legally binding emissions targets."
"No one wants to in any way stall or undermine the economic growth that is necessary to lift millions more out of poverty," Clinton responded. "We also believe that there is a way to eradicate poverty and develop sustainability that will lower significantly the carbon footprint."
Both sides appeared to be playing to the Indian audience, with Ramesh taking the opportunity to reinforce India's bottom line.
Now, on the one hand, I'm shocked, shocked that the great powers have some disagreement over global warming. And it should be noted that the rest of Clinton's India trip seems to have gone pretty well.
That said, I'm also not surprised that the Indians are acting surly towards the Americans. India did quite well uner the Bush administration on several dimensions. On the security front, India and U.S. interests converged on anti-terrorism and nonproliferation. On the economic front, the Bush administration refrained from criticizing the offshore outsourcing phenomenon that helped boost India's growth.
The Obama administration has not been hostile towards India, but I think they have taken the state of bilateral relations for granted. They've also committed a series of small blunders that riled New Delhi. This began with the attempt to have special envoy Richard Holbrooke's remit include India, and includes the administration's appointment of Ellen Tauscher to be the new Undersecretary of State for Arms Control and International Security (Tauscher led the fight against the India nuclear accord in the House).
It looks like Indian Prime Minister Manmohan Singh will be the first foreign dignitary to be the guest of President Obama for a state, so it's not like relations with New Delhi are being significantly downgraded. Still, I'd expect little flare-ups like the one between Ramesh and Clinton to occur from time to time -- and it's not just about atmospherics.
Slumdog Millionaire won the Golden Globe for Best Drama this past Sunday, presaging a strong run for the Best Picture Oscar -- provided it can deal with the inevitable blowback. And there will be blowback.
Without giving anything away, the movie is undeniably the feel-good flick of the year. The love story at its core, however, is tissue-thin. Dev Patel really does deserve an Oscar nod for Best Supporting Actor, because he manages to give his character's motivations far more emotional longing than the story justifies.
What I'm very curious about, however, is how the film will play in India. The movie has yet to be released on the subcontinent. According to the Associated Press, the film will open there on January 23rd. The story also explains why it might not play too well in India:
[S]cenes of Mumbai's filthy vast slums have drawn criticism from some viewers. Indian poverty is a delicate issue here, particularly when it is raised by outsiders [Danny Boyle, the director of Slumdog Millionaire, is British-DD]. While India has gone through spectacular economic growth over the past decade, about 400 million people — more than the entire population of the United States — are believed to live on less than $1 a day.
This is serious -- if Indians pan the movie, its shot at an Oscar is... er... shot.
Still, I suspect that the Dickensian fable will play well in the country where it is set. One criticism of the movie is that it paints the slums of Mumbai as too colorful and sanitized.
Readers who have seen the movie: does it deserve the Best Picture Oscar?
The country's antiterrorism effort is reactive and episodic rather than proactive and sustained. Its public discourse on Islam oscillates between crude, anti-Muslim bigotry and mindless sympathy for largely unjustified Muslim grievance-mongering. Its failure to either charm or cow its Islamist-friendly neighbors -- Pakistan and Bangladesh -- reveals a limited grasp of statecraft. Finally, India's inability to modernize its 150-million strong Muslim population, the second largest after Indonesia's, has spawned a community that is ill-equipped to seize new economic opportunities and susceptible to militant Islam's faith-based appeal.... In sum, the Indian approach to terrorism has been consistently haphazard and weak-kneed. When faced with fundamentalist demands, India's democratically elected leaders have regularly preferred caving to confrontation on a point of principle. The country's institutions and culture have abetted a widespread sense of Muslim separateness from the national mainstream. The country's diplomats and soldiers have failed to stabilize the neighborhood. The ongoing drama in Mumbai underscores the price both Indians and non-Indians caught unawares must now pay.Wha do you think?
Daniel W. Drezner is professor of international politics at the Fletcher School of Law and Diplomacy at Tufts University.